ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is set to consider revised policy guidelines for importing petroleum products on foreign suppliers’ accounts through customs-bonded storage facilities, as the government seeks to strengthen Pakistan’s energy security and build greater resilience in fuel supplies.
The existing policy was approved in June 2023, but no foreign supplier has so far established a bonded storage facility under the framework. The government now plans to revise the policy in response to vulnerabilities highlighted by disruptions in the Strait of Hormuz and the need to diversify and secure petroleum supply chains.
The Petroleum Division constituted a committee on May 7, 2026, to review the existing guidelines and recommend measures to make the bonded storage regime operational. The committee consulted major petroleum traders and suppliers and prepared a revised draft.
The draft was initially circulated among relevant ministries and institutions in June, including the Ministries of Finance and Commerce, Ministry of Maritime Affairs, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Oil and Gas Regulatory Authority (Ogra), Board of Investment and Special Investment Facilitation Council.
Following stakeholder feedback, particularly reservations raised by the FBR, the guidelines were amended and re-circulated in July. A further meeting chaired by the Minister for Energy (Petroleum Division) on August 5 resulted in additional revisions. However, the FBR continued to raise concerns regarding certain provisions under the Customs Act, 1969 and Sales Tax Act, 1990.
Under the proposed framework, foreign suppliers would be permitted to import crude oil, petrol, high-speed diesel (HSD), jet fuel, furnace oil, LPG and LNG through customs-bonded storage facilities. Products subject to international sanctions applicable to Pakistan or included in the Negative List of the Import Policy Order 2022 would remain excluded.
Foreign suppliers would be allowed to maintain bonded inventories at approved private and public storage terminals at locations including Port Qasim, KPT/Keamari, Hub, Gwadar, Mahmood Kot and Machike, Sheikhupura. Port-based bonded facilities would also be permitted for products intended for re-export.
The proposed system would allow bonded petroleum stocks to be transported through Pakistan’s national petroleum pipeline network from ports to approved inland storage facilities without triggering customs duties or taxes, provided the products remain within the bonded regime.
The existing import arrangements for licensed oil marketing companies (OMCs) and refineries would continue alongside the proposed framework.
The policy would require Ogra to establish product-specific safety, insurance, containment and emergency-response protocols before individual petroleum products could be stored at specific bonded locations.
Foreign suppliers could operate through a liaison office in Pakistan or a designated local consignee, including a registered branch or locally incorporated company. Consignees could establish dedicated storage facilities or utilise approved private and public bonded warehouses, subject to Ogra licensing and relevant customs and port regulations.
The proposal would also provide tax-neutral treatment for foreign suppliers and consignees while petroleum products remain within the bonded regime. For domestic sales, the OMC or refinery purchasing the product would assume responsibility for sales tax and related obligations at the time of ex-bonding.
Foreign suppliers would be permitted to negotiate commercial prices for sales of bonded petroleum products to local OMCs and refineries. Such transactions would not be subject to Ogra’s notified prices, although regulated pricing would apply to subsequent domestic sales by local purchasers.
The government would retain a limited right to requisition bonded petroleum stocks during formally declared emergencies, including war, armed conflict, major natural disasters or a complete and documented collapse of domestic supply. Requisitioned stocks would be compensated at prevailing international market prices based on the weekly average of the relevant Platts assessment.
Routine shortages, price fluctuations and geopolitical developments without an actual supply disruption would not qualify for emergency requisition.
The revised framework would also facilitate re-export of bonded petroleum products without requiring a Letter of Credit, advance payment, open contract or Electronic Export Form, subject to prescribed conditions.
Ogra would have a first right of refusal over the final 10% of petroleum products held under the scheme and would have two days to respond. Failure to respond within the stipulated period would constitute deemed approval.
For re-export, the consignee would submit the required goods declaration, which would be processed within 24 hours. The proposal also states that no prior regulatory approval would be required for re-export.
To improve monitoring, the FBR would provide Ogra access to relevant management information systems, while consignees would be required to submit daily stock reports to Ogra, detailing quantities by product and storage location.
The Petroleum Division believes the revised policy could play a key role in developing strategic petroleum storage capacity, diversifying supply sources and strengthening Pakistan’s overall energy security amid heightened regional risks.
Story by Mushtaq Ghumman
